baref00t on Nostr: #Bitcoin is the opportunity to take responsibility into your own hands. Here is why. ...
#Bitcoin is the opportunity to take responsibility into your own hands. Here is why.
Broad money refers to the total amount of money in an economy, including physical currency and bank deposits. There are several ways in which broad money can increase in an economy:
1/ Central bank actions: The central bank can increase the money supply through various measures such as lowering interest rates, buying government bonds, and lowering reserve requirements for banks. This increases the amount of money that banks have available to lend, which in turn increases the overall money supply.
2/ Government spending: When the government spends money, it enters into the economy and can increase the overall money supply. This can be done through various programs such as infrastructure spending, welfare programs, and military spending.
3/ Bank lending: Banks can create money through the process of lending. When a bank makes a loan, it creates a deposit in the borrower's account, effectively increasing the amount of money in circulation.
4/ Foreign investment: When foreign investors invest in an economy, they bring in foreign currency, which can be exchanged for the local currency, increasing the money supply.
Let's forget about foreign investments and we can perhaps agree that recent interest hikes are limiting bank lending, at least to the point that it would be the inflation driver.
So we are left with 1/ & 2/. We can assume that the government spending (deficit spending) which ultimately leads to increase in broad money supply is the main driver for inflation.
In order to get in under control, we need to reduce deficit spending. Is any government doing it? Not that I am aware, so until then let's get ready for inflation to stay, if not going higher.
Ultimately, if this goes for years, our buying power is going ⬇️
#Bitcoin is the opportunity to take responsibility into your own hands.
Broad money refers to the total amount of money in an economy, including physical currency and bank deposits. There are several ways in which broad money can increase in an economy:
1/ Central bank actions: The central bank can increase the money supply through various measures such as lowering interest rates, buying government bonds, and lowering reserve requirements for banks. This increases the amount of money that banks have available to lend, which in turn increases the overall money supply.
2/ Government spending: When the government spends money, it enters into the economy and can increase the overall money supply. This can be done through various programs such as infrastructure spending, welfare programs, and military spending.
3/ Bank lending: Banks can create money through the process of lending. When a bank makes a loan, it creates a deposit in the borrower's account, effectively increasing the amount of money in circulation.
4/ Foreign investment: When foreign investors invest in an economy, they bring in foreign currency, which can be exchanged for the local currency, increasing the money supply.
Let's forget about foreign investments and we can perhaps agree that recent interest hikes are limiting bank lending, at least to the point that it would be the inflation driver.
So we are left with 1/ & 2/. We can assume that the government spending (deficit spending) which ultimately leads to increase in broad money supply is the main driver for inflation.
In order to get in under control, we need to reduce deficit spending. Is any government doing it? Not that I am aware, so until then let's get ready for inflation to stay, if not going higher.
Ultimately, if this goes for years, our buying power is going ⬇️
#Bitcoin is the opportunity to take responsibility into your own hands.